Click on the headline (link) for the full text.
Many more articles are available through the Energy Bulletin homepage
After the credit crunch, the oil crunch: watchdog warns over falling supplies
David Gow, Guardian
The International Energy Agency is to call today for an energy revolution and a “major de-carbonisation” of global fuel sources as the world confronts tighter oil supplies caused by shrinking investment.
The energy watchdog is warning for the first time that oil output could pass its peak as power shifts from “super-majors” to national companies controlled by producer states. It highlights a potential oil-supply crunch.
The unprecedented wake-up call comes as the European commission says in a report due out tomorrow that while oilfields decline, the balance of supply and demand will become “increasingly tight, possibly critically so”.
It adds: “The need to address climate change will require a massive switch to high-efficiency, low-carbon energy technologies.”
The commission report warns that oil supplies are limited, with reserves and spare output capacity concentrated in a few hands.
(12 November 2008)
High marks for this article from TOD-reader MrMambo on the Nov 12 DrumBeat:
That was the most intelligent interpretation of the report I have seen by any major news-provider today. A lot of the focus has been on the short term demand destruction, but this article takes the longer perspective on things and sees through the intendes sugarcoating parts of the report (such as the unrealistic production increase forecasts).
This is the the first article that actually sees between the lines and extracts the vital bits of information provided by IEA.
World needs four new Saudi Arabias, warns IEA
Robin Pagnamenta, Times (UK)
Fresh sources of oil equivalent to the output of four Saudi Arabias will have to be found simply to maintain present levels of supply by 2030, one of the world’s leading energy experts has said.
Fatih Birol, chief economist of the International Energy Agency (IEA), the developed world’s energy watchdog, told The Times that the depletion of existing oilfields meant that vast new investments would be required to satisfy the demand for oil.
Global oil production stands at about 85million barrels per day. Saudi Arabia is the world’s largest producer: it pumped an estimated 9.4million barrels per day during October.
Dr Birol’s warning of a looming supply crunch emerged before the publication today of the IEA’s 2008 World Energy Outlook, which for the first time includes details of a comprehensive study of depletion rates in the world’s largest oilfields.
(12 November 2008)
Related at the BBC: Energy body warns on oil prices.
Countdown to $200 oil (12) – betting on Yergin
Jérôme a Paris , The Oil Drum
It’s been a while since I did a Countdown diary – no wonder, given that oil is now below $60, ie at the same level as when I started the initial “Countdown to $100” series back in 2005…
While the $200 target looks to be some ways off right now, given the expectations of a massive global downturn, the mechanism that has been pushing prices down is the same one that had been pushing prices up in the first part of the year (as I explained in this recent opus of the series: it’s the marginal cost of demand destruction that matters, rather than thr marginal cost of production. Demand was driving prices up when it was strong, and it is now driving prices down just as brutally as it is now crumbling just as spectacularly (whether directly, finally, because of high prices, or indirectly via the economic crunch).
But we now, unexepctedly, have a strong “buy” signal again: an article by CERA’s Daniel Yergin telling us that current prices are justified.
Yergin has an unbeaten track record of being wrong on oil prices this decade, as this graph suggests: …
(11 November 2008)
Also at European Tribune.
Jerome writes:
Daring, I know, given that oil is currently below $60… but sent also as advance notice that tomorrow is the big day when the International Energy Agency publishes its long awaited World Energy Outlook update, which is expected to significantly change the tone of the debate, as it will focus on production capacity and decline via via a bottom-up, field-by-field analysis which will bring down by a large number the expected oil production level estimates for the next 2 decades.
The Oil Drum will post a series of articles commenting on the report, so be on the lookout for them, starting tomorrow.
Anyway, the story for today is that Yergin is counting on oil prices to stay low, a sure sign, given his track record, that they should go up now! 😉
What lower oil prices mean for the world
Daniel Yergin, Financial Times
Oil prices are a barometer of the world economy. Rising prices between 2003 and 2007 reflected the best global economic growth in a generation. This high economic growth was brought to an end not only by underpricing of risk, excess liquidity and over-confidence but also by an increasingly unsustainable commodity boom – of which oil was a crucial part. Now, as the world has dropped into recession, oil prices have fallen by more than half.
This fall also reflects the power of price itself. For rising prices set in motion decisions by consumers, governments and businesses that have changed the course of demand. Now the recession is also weighing increasingly heavily on demand.
Of course, a price “collapse” to the $60-$70 range is a collapse only if one forgets that the average oil price in 2007 was $72 a barrel (and $66 in 2006). The tight balance between supply and demand was not the only factor driving the increase in oil prices. The last explosion in oil and other commodity prices began in the late summer of 2007, as a weakening dollar set off a “flight to commodities”.
(10 November 2008)
